Surgical pathology is, approximately, a 20 billion dollar a year industry (USA only). Unlike cyto- and hemapathology that focus on microscopic cells, surgical pathology is concerned with large tissue sections. Tissue sections are mounted under a coverslip on standard 3x1 inch microscope slides of which from 50 to 100 million are prepared per year. For at least ten years the PI (Principal Investigator) has worked with surgical pathologists interested in digital image handling. Again and again they have emphasized the diagnostic importance of scanning tissue sections at the lowest magnification possible. Yet, physical optics absolutely prevents any microscope lens from imaging the entire 50X25 mm coverslip. To solve this problem, the PI invented and received a patent on (1988) an entirely new instrument called PCM (PC Microscope) that, using a semiconductor-diode, fiber-optic device would permit a FCS (full coverslip) scan employing "shadow imaging." In addition, PCM would provide real-time, high-magnification display of regions selected from the shadow image with submicron resolution. Phase I NIH SBIR funding was requested to study the feasibility of PCM. When FCS images were shown to surgical pathologists, the comments were "fantastic" [University of Southern California], "remarkable and magnificent" [Mayo Clinic], etc. The president of the Association of Pathology Chairmen, i.e., the top pathologists in the USA, stated that he envisaged a market of 50,000 units. In diametric opposition to these comments by our potential customers and for reasons that the PI finds incomprehensible, the two NIH Study Sections that reviewed our request for Phase II SBIR funding stated that PCM was only a "laboratory curiosity" with a "very limited, perhaps non-existent [market]." The PI, therefore, is again requesting Phase II SBIR funding to reduce PCM to practice and then use two or more PCMs in a network demonstration (telepathology) where FCS is essential. PROPOSED COMMERCIAL APPLICATION: Optical microscopy is used by thousands of surgical pathologists in the USA and further thousands worldwide. No microscope today can provide simultaneous images of the entire coverslip as well as high resolution images of selected portions thereof. KSC's new microscope system provides both fast full coverslip imaging as well as real-time HDTV in a single low-cost unit. KSC's system is seen as the next generation microscope for surgical pathology. The chairman of the largest pathology department in the USA estimates a market of 50,000 units.